# 2026-22743: Medicare's Annual Payment Rule Reworks a Very Large Spreadsheet

2026-22743, Medicare and Medicaid Programs; CY 2027 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program, is a Federal Register rule from Health and Human Services Department, Centers for Medicare & Medicaid Services published 2026-11-09, effective 2027-01-01; deemed significant under Executive Order 12866; PRIA reads it as touching household money (as of 2026-11-11).

- Canonical: https://policyrisk.com/federal-register/2026-22743
- As of: 2026-11-11
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Document number: 2026-22743
- Title: Medicare and Medicaid Programs; CY 2027 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program
- Type: Rule
- Agencies: Health and Human Services Department; Centers for Medicare & Medicaid Services
- Citation: 91 FR 70992
- Published: 2026-11-09
- Effective: 2027-01-01
- Comments close: not stated
- Significant: yes (OIRA_API)
- Touches household money: yes
- Regulation identifier numbers: 0938-AV82
- Last updated: 2026-11-11

## In one line

Medicare's Annual Payment Rule Reworks a Very Large Spreadsheet

## Summary

Starting January 1, 2027, Medicare and Medicaid are updating how doctors and clinics get paid to better match real medical work and new laws. This includes new rules for drug price rebates, sharing savings programs, and payment updates for rural clinics and ambulance services. These changes affect doctors, patients, and healthcare providers, aiming to keep care fair, affordable, and up-to-date.

## Abstract

This final rule addresses: changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; codification of establishment of new policies for: the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act of 2022; limiting Medicare coverage of certain individuals; the Ambulatory Specialty Model; updates to drugs and biological products paid under Part B; Medicare Shared Savings Program requirements; updates to the Quality Payment Program; updates to policies for Rural Health Clinics and Federally Qualified Health Centers; update to the Ambulance Fee Schedule regulations; codification of the Inflation Reduction Act and Consolidated Appropriations Act, 2026 provisions; updates to Clinical Laboratory Fee Schedule regulations; updates to the Medicare Promoting Interoperability Program.

## Effects PRIA read

- 2027 Conversion Factor Reductions: cost, medium. Beginning January 1, 2027, Medicare uses two conversion factors for physician payments. The 2027 qualifying APM conversion factor is projected to decrease by $0.62 (−1.83%) from $33.5675, and the 2027 nonqualifying APM conversion factor is projected to decrease by $0.77 (−2.31%) from $33.4009.
- Finalized CY 2027 RVU Updates: mixed, medium. CMS finalized relative value units (RVUs) for calendar year 2027 under the Medicare Physician Fee Schedule to update payment systems to reflect changes in medical practice and statute. These RVU updates apply starting January 1, 2027.
- Indirect Practice Expense Allocation Change: mixed, medium. CMS finalized a change to allocate indirect practice expense (PE) using both the work RVU and the clinical labor RVU for all PFS services, except codes with 10- and 90-day global periods. This finalized methodology applies to CY 2027 payment calculations.
- Medicare Drug Inflation Rebate Program Updates: mixed, medium. The rule finalizes updates to the Medicare Part B and Part D Drug Inflation Rebate Programs, including: rules for identifying the CPI-U when CPI-U survey data are unavailable; clarification of the term "first marketed date"; clarification that certain skin substitutes are not excluded from Part B r…

## Related documents

- [2026-22812](https://policyrisk.com/federal-register/2026-22812): Medicare and Medicaid Programs; Cutting Administrative Requirements for Excellence in Patient Care, 2026-11-10
- [2026-22792](https://policyrisk.com/federal-register/2026-22792): Medicare Drug Price Negotiation Program and Medicare Prescription Drug Benefit Program, 2026-11-09
- [2026-22750](https://policyrisk.com/federal-register/2026-22750): Calendar Year 2027 Home Health Prospective Payment System (HH PPS) Rate Update; Requirements for the HH Quality Reporting Program and the E…, 2026-11-09
- [2026-22739](https://policyrisk.com/federal-register/2026-22739): Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; and Quality Reporting Programs; i…, 2026-11-06
- [2026-22381](https://policyrisk.com/federal-register/2026-22381): Medicare and Medicaid Programs; Organ Procurement Organizations Conditions for Coverage: Revisions to the Conditions for Coverage, 2026-11-03
- [2026-22194](https://policyrisk.com/federal-register/2026-22194): Medicare Program; CY 2027 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System, Acute Kidney Injury (AKI) Dialysis Paym…, 2026-10-30

## Sources
- [2026-22743 on federalregister.gov](https://www.federalregister.gov/documents/2026/11/09/2026-22743/medicare-and-medicaid-programs-cy-2027-payment-policies-under-the-physician-fee-schedule-and-other)
- [2026-22743 as published (PDF)](https://www.govinfo.gov/content/pkg/FR-2026-11-09/pdf/2026-22743.pdf)

## Related
- [Previous: 2026-22741, Amendments to the “Small Business” and “Small Organization” Definitions for Inv…](https://policyrisk.com/federal-register/2026-22741)
- [Next: 2026-22750, Calendar Year 2027 Home Health Prospective Payment System (HH PPS) Rate Update;…](https://policyrisk.com/federal-register/2026-22750)
- [All Federal Register documents](https://policyrisk.com/federal-register)

Source: PRIA, https://policyrisk.com/federal-register/2026-22743 (as of 2026-11-11).